Zero Hours Contracts Continues to Rise Despite Jobs Recovery

The number of people on a zero hours contract (ZHC) was 801,000 in the final quarter of 2015, up from 697,000 in late 2014 – an increase of 15 per cent, the independent think tank Resolution Foundation said today (Wednesday) in response to new figures from the ONS.

The share of workers on a ZHC grew even as the labour market strengthened over the course of the 2015, when pay rebounded and employment continued its impressive upward march.

The increase in ZHCs largely comes from workers aged 16-24, suggesting that the young are bearing the brunt of the rise in unstable employment.

While some students in particular like the flexibility that ZHCs provide, the increase presents a growing challenge for many young people at the start of their careers, particularly against a backdrop of high underemployment and weak wage growth.

Laura Gardiner, Senior Research and Policy Analyst at the Resolution Foundation, said:

“As a share of the workforce, the number of people on zero hours contracts continues to rise despite the record employment rate and the long-overdue pay recovery last year. It’s increasingly clear that ZHCs are here to stay, whatever the economic weather.

“While some workers value the flexibility they provide, others struggle to manage their fluctuating pay levels week by week and find it hard to budget and put any money aside as savings. This explains why one in three workers on a ZHC want more hours.

“While zero hours contracts still make up a comparatively small, albeit growing, part of the labour market, it is still crucial that policy makers consider the effect of unstable employment on both workers and the economy, while ensuring the employment rate continues to reach record highs.”

Notes to Editors

• The latest estimate of the number of people who are employed on “zero-hours contracts” in their main employment, from the LFS, a survey of individuals in households, is 801,000 for October to December 2015, representing 2.5% of people in employment.
• The ONS’s survey of employers showed that there were 1.7 million ZHCs in November 2015. This higher number will be partly driven by people having more than one ZHC with different employers. The hospitality sector remains the biggest user of ZHCs, with around a third of businesses making employing workers on them.